Suppose there are three people in society who vote on whether the government should undertake specific projects. Let the net benefits of a particular project be $150, $140, and $50 for persons A, B, and C, respectively.a. If the project costs $300 and these costs are to be shared equally, would a majority vote to undertake the project? What would be the net benefits to each person under such a scheme? Would total net benefits be positive?b. Suppose the project cost $375 and again costs were to be shared equally. Now would a majority vote for the project and total net benefits be positive?c. Suppose (presumably contrary to fact) votes can be bought and sold in a free market. Describe what kinds of results you might expect in part a and part b. Suppose there are three people in society who vote on whetherthe government should undertake specific projects. Let the netbenefits of a particular project be $150, $140 and $50 for personsA, B, and C, respectively.a. If the project costs $300 and these costs are to be sharedequally, would a majority vote to undertake the project?What would be the net benefits to each person under such ascheme? Would total net benefits be positive?b. Suppose the project cost $375 and again costs were to beshared equally. Now would a majority vote for the projectand total net benefits be positive?c. Suppose (presumably contrary to fact) votes can be boughtand sold in a free market. Describe what kinds of results youmight expect in part a and part b.

Under the majority rule, the project is undertaken if the majority votes in the favor of the…

Answered: uppose there are three people in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose there are three people in society who vote on whether the government should undertake specific projects. Let the net benefits of a particular project be $150, $140, and $50 for persons A, B, and C, respectively.

a. If the project costs $300 and these costs are to be shared equally, would a majority vote to undertake the project? What would be the net benefits to each person under such a scheme? Would total net benefits be positive?

b. Suppose the project cost $375 and again costs were to be shared equally. Now would a majority vote for the project and total net benefits be positive?

c. Suppose (presumably contrary to fact) votes can be bought and sold in a free market. Describe what kinds of results you might expect in part a and part b.

Suppose there are three people in society who vote on whether
the government should undertake specific projects. Let the net
benefits of a particular project be $150, $140 and $50 for persons
A, B, and C, respectively.
a. If the project costs $300 and these costs are to be shared
equally, would a majority vote to undertake the project?
What would be the net benefits to each person under such a
scheme? Would total net benefits be positive?
b. Suppose the project cost $375 and again costs were to be
shared equally. Now would a majority vote for the project
and total net benefits be positive?
c. Suppose (presumably contrary to fact) votes can be bought
and sold in a free market. Describe what kinds of results you
might expect in part a and part b.

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